Chinese tech-enabled workforce operational solution platform Quhuo Limited has commanded a market value of $456 million after the company raised $33 million in an initial public offering (IPO) on the Nasdaq Global Market on July 10.
Beijing-based Quhuo offered 3.3 million American depositary shares (ADSs) at a price of $10 apiece, the midpoint of the proposed range between $9 and $11. Its shares surged 109 per cent to reach a peak of $20.90 and then stabilised at the closing price of $12.77 on the debut date.
The company plans to spruce up the development of the workforce management platform and also expand its marketing network.
Quhuo, which was co-founded by former DHL’s executives Leslie You Yang, Yang Shuyi and Ba Zhen in 2012, provides tech-driven and end-to-end services to consumer service brands.
It leverages freelancing workers to support efficient services for sectors such as food delivery, ride-hailing, bike-sharing and housekeeping across 73 cities. It counts a portfolio of Chinese giants as top clients including Meituan, Alibaba’s Ele.me, Mobike, Didi, among others.
Revenues from food delivery business accounting for over 98 per cent of annual earnings for the third year in a row. During the same period, Quhuo generated annual revenue of 655 million ($94 million), 1.48 billion yuan ($211 million) and 2.01 billion yuan ($294 million), respectively. It also recorded net losses of 13.4 million yuan ($1.9 million) in 2019 and 11.1 million yuan ($1.6 million) for the first quarter of 2020.
Following the IPO, Chinese search engine giant Baidu will remain the largest external shareholder with 11.46 per cent stake and 4.56 per cent voting right, while Japanese SoftBank China Capital (SBCVC) and ClearVue will hold 11.24 per cent and 6.97 per cent interest respectively.
Baidu and SBCVC had collectively infused ‘tens of millions of USD dollars’ in Quhuo’s Series B round of financing in 2014. Besides, SBCVC had also participated in its Series A and C rounds.
Quhuo’s prominent backers also include Taiwan CDFH’s cross-border investment arm CDIB Venture Capital, Zhongnan Group, Fusi Capital, Long Capital, iStart Venture Capital, and PreAngel.
Shares of Quhuo are listed under the symbol “QH.” Roth Capital, Valuable Capital, and Tiger Brokers served as the joint underwriters for the deal.